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Notice to Importers

Beef and Veal Imports (Items 114 to 116 on the Import Control List)

Serial No: 867Date: December 4, 2014

This Notice replaces Notice to Importers No. 846, dated October 30, 2013, and will remain in effect until further notice.

This Notice is provided pursuant to the authority of the Export and Import Permits Act (EIPA) and its corresponding regulations.

NOTE: Please, note that the reference period applicable to the 2016 TRQ year and the followings is October 1 to September 30 immediately preceding the allocation year.

In Brief

Imports into Canada of beef and veal from non-FTA countries (Australia, Japan, New Zealand, and Uruguay) are subject to import controls under Canada’s Export and Import Permits Act (EIPA). Accordingly, an import permit is required for shipments of beef and veal from non-FTA countries to enter Canada. Import permits for shipments of beef and veal destined to the Canadian market are issued to allocation holders under Canada’s tariff rate quota (TRQ) for beef and veal, which is administered by Foreign Affairs, Trade and Development Canada (DFATD).

The access quantity for the beef and veal TRQ is 76,409,000 kilograms. The allocation period for the beef and veal TRQ extends from January 1 to December 31, inclusive.

This Notice to Importers sets out the policies and practices pertaining to the administration of the TRQ, including the allocation, underutilization, return and transfer policies. This Notice also explains how to apply for import permits.

1. Purpose

a) to set out the regulations, policies and practices pertaining to the administration of Canada’s TRQ for beef and veal ;

b) to invite applications for allocations under the beef and veal TRQ for the next quota year; and

c) to explain how to apply for import permits for imports of beef and veal.

2. Definitions

“Country-specific reserve” means a specific portion of the TRQ that is reserved exclusively for imports from a specific country.

“Distributor” means a distributor that is not a commission broker and that

(a) buys beef and veal and re-sells them to other businesses; and

(b) maintains or rents a warehouse and trucks, or purchases warehousing or transportation services in carrying on its trade.

“Most-Favoured-Nation (MFN) Pool” means the portion of the TRQ that is available for imports from eligible non-FTA countries and for imports from Australia and New Zealand once their country-specific reserves are fully utilized.

“FTA country” means a country from which imports of beef and veal are not subject to the tariff rate quota in accordance with a free trade agreement (FTA) with Canada.

“Process” means to substantially change the appearance or nature of beef and veal, including to de-bone, slice, comminute, thermally process, preserve, dehydrate, ferment, render, fractionate, defibrinate or add to the product, but does not include to dress, trim, refrigerate, freeze, package or defrost.

“Processor” means a person who has processed beef and veal at their own facilities during the 12-month period ending on September 30 in the calendar year before the calendar year for which the person applies for an import allocation.

“Retailer-processor” means a retailer who has processed beef and veal at their own facilities during the 12-month period ending on September 30 in the calendar year before the calendar year for which the retailer applies for an import allocation.

3. General Information

3.1 Background

3.1.1. In accordance with its commitments under the World Trade Organization (WTO), Canada has in place a TRQ for imports of beef and veal.

3.1.2. Under Canadian TRQs, in any given year, a predetermined quantity of imports of a good controlled under the EIPA can enter Canada at a lower rate of duty, while imports over this quantity are subject to higher rates of duty. The TRQs therefore have three components: an import access quantity negotiated with Canada’s international trade partners; a within access commitment rate of duty that applies to imports up to the access level; and a higher, over access commitment rate of duty for imports over the access level.

3.1.3. The within and over access rates of duty that apply to imports of beef and veal can be found in Canada’s Customs Tariff.

3.1.4. Pursuant to the EIPA and its corresponding regulations, when deciding whether to issue an import allocation or whether to consent to a transfer, the Minister shall take into account whether the import allocation holder has furnished false or misleading information in connection with any reports required by the Act or the regulations made under the Act or by any condition of an import allocation or import permit during the 12-month period preceding the period in respect of which the import allocation or transfer is to apply. Furthermore, the Minister may attach conditions to import allocations and/or to import permits, and may amend, suspend, cancel or re-instate import permits and allocations.

3.1.5. Failure by an applicant to provide any information requested by DFATD, or failure to comply with any condition of an allocation or permit issued pursuant to the EIPA may result in the rejection of the application for an allocation under the beef and veal TRQ, the reduction or cancellation of an allocation issued pursuant to the EIPA, or the cancellation of associated permits.

3.2 Access Quantity

3.2.1. The access level for the beef and veal TRQ is 76,409,000 kilograms.

3.2.2. Within the TRQ, there are two country-specific reserves and a Most-Favoured-Nation (MFN) pool:

29,600,000 kilograms is available within the country-specific reserve for imports from New Zealand (NZ);

35,000,000 kilograms is available within the country-specific reserve for imports from Australia;

11,809,000 kilograms is available within the MFN pool for imports from eligible non-FTA countries, including those from New Zealand and Australia once their country-specific reserves are fully utilized.

3.3 Allocation Period

3.3.1 The quota allocation year for the beef and veal TRQ extends from January 1 to December 31, inclusive.

3.3.2 Eligibility for an allocation, and the size of that allocation, will be assessed on the basis of each applicant’s processing and import activity in the beef and veal sector during the base period of October 1 to September 30 immediately preceding the allocation year. Applicants must be active in the processing or import of beef and veal at the time of application, and must remain active throughout the quota year for which they are seeking an allocation.

4. Products Covered

4.1. This Notice pertains to items 114 to 116 on the Import Control List, namely fresh, chilled or frozen beef and veal imported from non-FTA countries under headings 02.01 and 02.02 in the list of tariff provisions set out in the Schedule to the Customs Tariff.

4.2. Importers who require a determination as to whether the product they intend to import is eligible under the beef and veal TRQ are encouraged to obtain an advanced tariff classification ruling from the appropriate regional client service office of the Canada Border Services Agency (CBSA).

5. Allocation Method

5.1. The beef and veal TRQ is allocated to two groups:

(a) eligible processors and retailer-processors; and

(b) eligible distributors.

5.2. The quantity allocated to the processor and retailer-processor group is 57,307,000 kilograms (equivalent to 75% of the TRQ).

5.3. The quantity allocated to the distributor group is 19,102,000 kilograms (equivalent to 25% of the TRQ).

5.4. For both groups, the quantity allocated to eligible applicants is the equivalent of their market-share within their respective group.

5.5. Processors’ and retailer-processors’ market shares are calculated in accordance with the amount of non-FTA beef and veal processed in their own facilities, including any non-FTA beef and veal imported by another firm, during the relevant base period.

5.6. Distributors’ market shares are calculated on the basis of their imports of non-FTA beef and veal during the relevant base period. In calculating their imports, distributors may include only quantities of (i) non-FTA beef and veal imported under the authority of an import permit issued to the applicant and (ii) beef and veal imported by the applicant at the 26.5% over-access rate of duty.

5.7. Allocations are not tied to a specific portion or reserve of the TRQ. Allocation holders may utilize their allocation to import beef from any eligible non-FTA country within the limits of the access quantities set out in section 3.2.2. Once the access quantity is reached within a country-specific reserve, or within the MFN pool, imports that might otherwise have been imported at the within access commitment rate of duty within the relevant country-specific reserve, or within the MFN pool, will be subject to the higher “over access commitment” rate of duty of 26.5% regardless of whether the importer has an unused quota allocation. The Department publishes a daily report on its website outlining the utilization rate for the two country-specific reserves and the MFN pool. Allocation holders are encouraged to monitor closely the utilization rates and manage their purchasing decision accordingly.

5.8. All import allocations expire at the end of each allocation year, and all applicants interested in receiving an import allocation must reapply each year.

5.9. To ensure an orderly transition between quota years, processors, retailer-processors and distributors who were allocation holders under the beef and veal TRQ in the previous year will normally be issued advances up to a maximum of 30% of their previous year’s import allocations or a minimum of 18,144 kg. Advances to applicants likely to be subject to an under-utilization penalty, pursuant to section 7.1., will be evaluated on a case-by-case basis. An advance will normally be issued only if a completed application has been received in accordance with section 6.

6. How to apply for an Allocation

6.1. Applicants who wish to apply for an allocation under the beef and veal TRQ are invited to submit their fully completed application form, attached as Appendix 1, no later than the 1st of December immediately preceding the opening of the quota year.

6.2. Companies that engage in both processing and distributing activities may submit an application under both groups.

6.3. In addition to the total processing data (for processors and retail-processors) and the total imports data (for distributors) for the relevant base period, applicants are required to provide with their application a monthly breakdown of the relevant processing activities or imports throughout the base period.

6.4. For processor and retailer-processor applicants, the purchase invoices showing the usage of beef and veal imported from non-FTA countries must clearly state the name and address of the purchaser, the date of importation or purchase and consignment, the weight and the country of origin.

6.5. For distributor applicants, the purchase invoices showing the beef and veal imported from non-FTA countries must clearly state the name and address of the purchaser, the date of importation or purchase and consignment, the weight, value, type of product imported and that the product was exported from non-FTA countries. To be counted, beef and veal purchases must have been delivered to the importer within the relevant base period. The applicant must also have paid for the product in the same period.

6.6. Distributor applicants may not count imports made by another firm and sold to the distributor once the product has entered Canada.

6.7. Estimates of total processing activity or total imports based on statistical sampling techniques and findings resulting from such techniques are not acceptable nor allowed for the purposes of this Notice. Applications for import allocations from firms found using such techniques will be deemed incomplete.

6.8. Only fresh, chilled or frozen beef and veal falling within Customs Tariff headings 02.01 and 02.02 may be included in the quantity of goods imported. Generally, this is beef and veal that has been neither cooked nor had spices added to it. Questions as to whether particular imports of beef and veal fall under the above-mentioned tariff headings should be addressed tothe appropriate regional client service office of the CBSA.

6.9. All applicants for an allocation are required to include as part of their application:

an sworn affidavit; and

a letter from an independent qualified professional (normally an accountant) verifying the information included in the application

6.10. For the purpose of this Notice, "accountant" is defined as a member in good standing of the Chartered Professional Accountant of Canada (CPA) who is registered with his/her provincial professional organization to provide accounting services and is independent from the applicant (i.e., is not an owner, a partner, a director, nor an employee of the company applying for an import allocation).

6.11. The affidavit and the letter from the accountant must be in the exact format of the models attached to this Notice (see Appendices 3 and 4 for processor and retailer-processor applicants; Appendices 5 and 6 for distributor applicants). Any changes to the wording of the prescribed affidavit or letter are permitted only if required by professional standards. In the event that changes are made, the applicant or the accountant must discuss these, in advance, with DFATD.

6.12. The information that the applicant provides will be considered when allocating the TRQ. DFATD retains the right to request additional information. An applicant may be required to provide evidence of the actual quantity of beef and veal processed or imported, such as originals of invoices or proofs of payment. Accountants may be asked to explain the procedures used in greater detail and may be asked to provide DFATD with copies of all working documents. Any costs associated with a request for additional information will be borne by the applicant. Failure to provide information requested may result in the application being deemed incomplete.

6.13. The declaration in the application form allows DFATD and its representatives access to any information pertaining to the applicant in relation to the application for an import allocation or to subsequent applications for, or concerning the use of, import permits that is in the files of Agriculture and Agri-Food Canada or the Canadian Food Inspection Agency. Normally, applicants are informed of any such requests for information.

6.14. Applications sent by MAIL or COURIER should be addressed to the beef and veal quota manager at DFATD. The name and mailing address of the beef and veal quota manager can be obtained on the DFATD website, under Contact Us.

6.15. Applications sent by E-MAIL should be sent to Beef.Veal-Boeuf.Veau@international.gc.ca. Applicants sending their application by e-mail should be prepared to present the original version of their application at DFATD’s request. Failure to do so may lead to the cancellation of any allocation issued pursuant to the application and/or the cancellation of associated permits.

6.16. For legibility reasons, applications sent by facsimile will not be accepted.

6.17. Applications postmarked after the deadline, or in a format other than that required, will not be considered. Lost applications will not normally be considered without acceptable proof that they were sent before the deadline (e.g., courier receipt).

7. Under-Utilization, Adjustment, Return and Re-Allocation Policies

7.1. Under-Utilization Policy

7.1.1. An allocation holder with a utilization rate less than 90% in the previous quota year may have its allocation adjusted downward by an under-utilization penalty for the new quota year. Footnote 1

7.1.2. For allocation holders that under-utilized in the previous quota year, allocations in the new quota year will be reduced by the percentage of the allocation not utilized in the previous quota year. Footnote 2

7.1.3. The under-utilization penalty may be waived if the total amount of the shortfall is less than 9,000 kilograms.

7.1.4. Allocation holders that under-utilized during the previous quota year will be advised of the applicable under-utilization penalty before the allocations are finalized for the new quota year.

7.2. Allocation Adjustment Policy

7.2.1. Allocation holders with an initial allocation of 100,000 kilograms or more who have utilized 20% or less of their allocation by July 1 of the allocation year will have their unused allocation adjusted downward by 50%.

7.2.2. Once they have utilized 80% of their adjusted allocation, allocation holders who have had their allocations adjusted in accordance with this policy will be eligible to apply for a share of any quantities available under the Re-Allocation Policy set out in section 7.4.

7.2.3. Quantities retrieved by the department under the allocation adjustment policy will not be considered unused for the purpose of administering the under-utilization policy identified in section 7.1.

7.3. Return Policy

7.3.1. Allocation holders may return any portion of the balance of their allocation by informing DFATD in writing, no later than October 1 of the quota year, of the amount they are returning. Any portion of an allocation that is returned by that date will be considered as having been used for purposes of administering the under-utilization policy identified in section 7.1.

7.4. Re-Allocation Policy

7.4.1. Quota that becomes available through the allocation adjustment policy referenced in section 7.2., or by way of returns at any point in the quota year, will normally be re-allocated to eligible applicants on a first-come-first-served, load-by-load basis (to a maximum of 26,000 kilograms per load) until the entire amount has been re-allocated.

7.4.2 Applicants who have utilized 80% or more of their allocation may apply, in writing, to be placed on a waiting list for a share of any quantities available for re-allocation.

7.4.3. Applications for re-allocations from applicants who have not utilized 80% of their allocation will not be accepted.

8.0 Transfer Policy

8.1. The transfer (i.e., purchase, sale or rent) of import allocations is normally prohibited. However, a firm may sell imported non-FTA beef and veal to another firm after the product has been cleared through customs. Processors and retailer-processors should be mindful that such sales will affect their processing figures that will be used in calculating their allocation in the next quota year.

8.2. DFATD does not prohibit companies with allocations from utilizing the services of importers or brokers to source beef and veal. However, the firm to whom a permit is issued MUST be the same as the importer of record on CBSA's B3 customs entry document.

9. Supplemental Imports

9.1. The Minister may, at his discretion, authorize imports of beef and veal in excess of the import access quantity. The Notice to Importers Beef and Veal – Supplemental Imports, explains the administration of supplemental imports for beef and veal. The Notice is available on the DFATD website at Beef and Veal.

10. Import Permits

10.1. Types of Permits

10.1.1. An import permit issued by DFATD is required for every shipment of beef and veal covered by this Notice to enter Canada. For a given shipment, importers may either present a shipment-specific import permit or invoke the appropriate General Import Permit (GIP).

10.1.2. Non-FTA fresh, chilled or frozen beef and veal imported directly into a bonded warehouse does not require either a specific import permit or a general import permit. However, an import permit is required to move goods out of a bonded warehouse for consumption in Canada.

10.2. Shipment-Specific Import Permits

10.2.1. Shipment–specific import permits are normally issued on demand to allocation holders up to the amount of their allocation under Canada’s beef and veal TRQ. Shipments entering Canada under a shipment-specific import permit can normally do so at the within access rate of duty so long as there is sufficient quota remaining within the relevant country-specific reserve, or in the MFN pool, as set out in section 3.2.

10.2.2. To claim the within access rate of duty for a shipment, the importer must present the shipment-specific import permit to the CBSA at the time of final accounting.

10.2.3. Shipment-specific import permits will not normally be issued retroactively for shipments that have already been imported into Canada, including under the authority of a GIP, regardless of the importer’s allocation.

10.2.4. For a shipment-specific import permit to be considered valid, the name on the permit must match exactly the name of the importer on CBSA’s B3 customs entry and related documents at time of final accounting. Furthermore, the quantity on the permit must be the same as the net quantity on the Customs invoice. It is incumbent on the recipient of the permit to ensure that a permit application is made in the name of the importer of record and includes the correct quantity. Questions about the proper procedures to fill out customs entry documents should be addressed to local CBSA officials.

10.3. Shipment-Specific Import Permits for Imports under the MFN Pool

10.3.1. Once the MFN pool has been fully utilized, shipment-specific import permits will not normally be extended beyond the 30 days validity period.

10.3.2. When MFN permits are cancelled following the expiration of their validity, the released quantity will be made available on a first-come-first-served, load-by-load basis to allocation holders who have requested that they be placed on the MFN import permit waiting list.

10.3.3. Allocation holders who wish to be added to the MFN import permit waiting list should make a request to DFATD in writing. Requests will be accepted once the utilization rate of the MFN pool reaches 11.6 million kilograms. Requests received before this point will be rejected.

10.3.4. In establishing the MFN waiting list, preference will be given to companies that have not requested permit extensions or that have no outstanding expired permits.

10.4 General Import Permit

10.4.1. The GIP that applies for beef and veal is General Import Permit (GIP) No. 100 – Eligible Agricultural Goods [http://laws-lois.justice.gc.ca/eng/regulations/SOR-95-37/index.html]. There is no limit to the quantities of beef and veal that may enter Canada under the GIP; however, such imports will be subject to the higher "over access commitment" rate of duty.

10.5 How to Apply for a Permit

10.5.1 Information about the permit application process, including information about fees, the monthly billing system, information required from applicants and the permit application form, is available on the DFATD website: Applying for an Import Permit.

11. Contact us

11.1. Names and direct phone numbers for quota manager(s), permit officer(s), and the Help Desk are available on the DFATD website: Contact Us.

11.2. For directory assistance, you may call 343-203-4372.

Footnotes

Footnote 1

The utilization rate (%) will be calculated for every allocation holder as follows:

Where:“Pre-penalty Allocation (kg)” is the allocation that the allocation holder would have been eligible for in the new quota year, if the allocation holder had not under-utilized in the previous quota year.